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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2008
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
    
    52-2056410(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)1919 North Lynn StreetArlington, Virginia
    
    22209(Address of principal executive offices)
    
    (Zip Code)
 (571) 303-3000
 Not applicable.
 þ o
  Large accelerated filer
þ
    
    Accelerated filer
o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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THE CORPORATE EXECUTIVE BOARD COMPANY
   INDEX TO FORM 10-Q
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets at March 31, 2008 and December 31, 2007
    
    
    3Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    15PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    16Item 1A. Risk Factors
    
    
    16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3. Defaults Upon Senior Securities
    
    
    16Item 4. Submission of Matters to a Vote of Security Holders
    
    
    16Item 5. Other Information
    
    
    16Item 6. Exhibits
    
    
    17
  2




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 March 31,
    
    
    December 31,2008
    
    
    2007(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    55,470
    
    
    $
    47,585Marketable securities
    
    
    36,075
    
    
    
    24,153Membership fees receivable, net
    
    
    111,849
    
    
    
    161,336Deferred income taxes, net
    
    
    12,752
    
    
    
    12,710Deferred incentive compensation
    
    
    13,831
    
    
    
    15,544Prepaid expenses and other current assets
    
    
    9,369
    
    
    
    10,638Total current assets
    
    
    239,346
    
    
    
    271,966Deferred income taxes, net
    
    
    24,393
    
    
    
    24,307Marketable securities
    
    
    60,800
    
    
    
    72,618Property and equipment, net
    
    
    106,091
    
    
    
    91,904Goodwill
    
    
    42,626
    
    
    
    42,626Intangible assets, net
    
    
    20,691
    
    
    
    22,143Other non-current assets
    
    
    18,377
    
    
    
    19,208Total assets
    
    $
    512,324
    
    
    $
    544,772Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    48,131
    
    
    $
    62,681Accrued incentive compensation
    
    
    32,106
    
    
    
    31,355Deferred revenues
    
    
    335,522
    
    
    
    323,395Total current liabilities
    
    
    415,759
    
    
    
    417,431Other liabilities
    
    
    61,963
    
    
    
    59,794Total liabilities
    
    
    477,722
    
    
    
    477,225Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized, 43,141,391 and 43,119,512 shares issued, and
34,075,460 and 34,993,581 shares outstanding at March
31, 2008 and December 31, 2007, respectively
    
    
    431
    
    
    
    431Additional paid-in capital
    
    
    386,721
    
    
    
    383,636Retained earnings
    
    
    270,269
    
    
    
    269,429Accumulated elements of other comprehensive income (loss)
    
    
    550
    
    
    
    (194
    )Treasury stock, at cost, 9,065,931 and 8,125,931 shares
at March 31, 2008 and December 31, 2007, respectively
    
    
    (623,369
    )
    
    
    (585,755
    )Total stockholders equity
    
    
    34,602
    
    
    
    67,547Total liabilities and stockholders equity
    
    $
    512,324
    
    
    $
    544,772
  3




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THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three months endedMarch 31,2008
    
    
    2007Revenues
    
    $
    138,023
    
    
    $
    124,525Cost of services
    
    
    45,055
    
    
    
    44,676Gross profit
    
    
    92,968
    
    
    
    79,849Costs and expenses:Member relations and marketing
    
    
    41,900
    
    
    
    34,246General and administrative
    
    
    19,727
    
    
    
    17,117Depreciation and amortization
    
    
    5,562
    
    
    
    2,906Total costs and expenses
    
    
    67,189
    
    
    
    54,269Income from operations
    
    
    25,779
    
    
    
    25,580Other income, net
    
    
    698
    
    
    
    5,915Income before provision for income taxes
    
    
    26,477
    
    
    
    31,495Provision for income taxes
    
    
    10,591
    
    
    
    12,125Net income
    
    $
    15,886
    
    
    $
    19,370Earnings per share:Basic
    
    $
    0.46
    
    
    $
    0.50Diluted
    
    $
    0.45
    
    
    $
    0.50Dividends per share
    
    $
    0.44
    
    
    $
    0.40Weighted average shares used in the calculation of earnings per share:Basic
    
    
    34,728
    
    
    
    38,412Diluted
    
    
    34,962
    
    
    
    39,117
  4




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THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three months endedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    15,886
    
    
    $
    19,370Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    5,562
    
    
    
    2,906Deferred income taxes
    
    
    (491
    )
    
    
    (1,097
    )Share-based compensation
    
    
    2,583
    
    
    
    6,578Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (733
    )Amortization of marketable securities premiums (discounts), net
    
    
    188
    
    
    
    (431
    )Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    49,487
    
    
    
    69,013Deferred incentive compensation
    
    
    1,713
    
    
    
    1,112Prepaid expenses and other current assets
    
    
    1,269
    
    
    
    (377
    )Other non-current assets
    
    
    831
    
    
    
    (1,283
    )Accounts payable and accrued liabilities
    
    
    (8,146
    )
    
    
    (21,970
    )Accrued incentive compensation
    
    
    751
    
    
    
    2,542Deferred revenues
    
    
    12,127
    
    
    
    6,504Other liabilities
    
    
    2,169
    
    
    
    2,033Net cash flows provided by operating activities
    
    
    83,929
    
    
    
    84,167Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (24,702
    )
    
    
    (3,726
    )Maturities (purchases) of marketable securities, net
    
    
    815
    
    
    
    (201
    )Net cash flows used in investing activities
    
    
    (23,887
    )
    
    
    (3,927
    )Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    100
    
    
    
    158Proceeds from the issuance of common stock under the employee stock purchase plan
    
    
    403
    
    
    
    559Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    733Purchase of treasury shares
    
    
    (37,614
    )
    
    
    (126,401
    )Payment of dividends
    
    
    (15,046
    )
    
    
    (15,043
    )Net cash flows used in financing activities
    
    
    (52,157
    )
    
    
    (139,994
    )Net increase (decrease) in cash and cash equivalents
    
    
    7,885
    
    
    
    (59,754
    )Cash and cash equivalents, beginning of period
    
    
    47,585
    
    
    
    171,367Cash and cash equivalents, end of period
    
    $
    55,470
    
    
    $
    111,613
  5




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THE CORPORATE EXECUTIVE BOARD COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
   Note 2. Condensed consolidated financial statements
   Note 3. Accounting pronouncements
 Recently adopted
   6




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Not yet adopted
    Note 4. Fair value measurement
  
 
 
 7




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Fair Value Measurements at Reporting Date UsingFair Valueas ofMarch 31,2008
    
    Level 1
    
    Level 2
    
    Level 3Financial assetsCash and cash equivalents
    
    $
    55,470
    
    
    $
    55,470
    
    
    $
    
    
    
    $
    Available-for-sale marketable securities
    
    
    96,875
    
    
    
    96,875
    
    
    
    
    
    
    
    Variable insurance products held in a Rabbi Trust
    
    
    14,104
    
    
    
    
    
    
    
    14,104
    
    
    
    Financial liabilitiesForward exchange contracts
    
    $
    1,114
    
    
    $
    
    
    
    $
    1,114
    
    
    $
    Deferred compensation obligations
    
    
    12,750
    
    
    
    
    
    
    
    12,750
    
    
    
    
 Note 5. Other liabilities
  March 31,
    
    
    December 31,2008
    
    
    2007Deferred compensation
    
    $
    11,532
    
    
    $
    12,242Lease incentives
    
    
    30,709
    
    
    
    31,201Deferred rent benefit  long term
    
    
    11,523
    
    
    
    8,081Accrued lease restructuring charges
    
    
    5,099
    
    
    
    5,165Deferred revenues  long term
    
    
    3,100
    
    
    
    3,105Total other liabilities
    
    $
    61,963
    
    
    $
    59,794
 Note 6. Stockholders equity and share-based compensation
 Share-based compensation
  Three months ended March 31,2008
    
    
    2007Cost of services
    
    $
    914
    
    
    $
    3,276Member relations and marketing
    
    
    (309
    )
    
    
    1,331General and administrative
    
    
    1,978
    
    
    
    1,9712,583
    
    
    
    6,578Income tax benefit
    
    
    (1,033
    )
    
    
    (2,533
    )Total share-based compensation, net of tax benefit
    
    $
    1,550
    
    
    $
    4,045
     8




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Share Repurchases
  Dividends
  Note 7. Earnings per share
  Three months ended March 31,2008
    
    2007Basic weighted average common shares outstanding
    
    
    34,728
    
    
    
    38,412Effect of dilutive common shares outstanding
    
    
    234
    
    
    
    705Diluted weighted average common shares outstanding
    
    
    34,962
    
    
    
    39,117
  Note 8. Comprehensive income
  Three months ended March 31,2008
    
    
    2007Net income
    
    $
    15,886
    
    
    $
    19,370Net change in unrealized gains
    
    
    664
    
    
    
    264Net unrealized gains on derivatives
    
    
    46
    
    
    
    396Total comprehensive income
    
    $
    16,596
    
    
    $
    20,030
 Note 9. Commitments and contingencies
  9




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Note 10. Subsequent events
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  10




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Business Overview
        Critical Accounting Policies
  11




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Results of Operations
  Three months ended March 31,2008
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    32.6
    
    
    
    35.9Gross profit
    
    
    67.4
    
    
    
    64.1Costs and expenses:Member relations and marketing
    
    
    30.4
    
    
    
    27.5General and administrative
    
    
    14.3
    
    
    
    13.7Depreciation and amortization
    
    
    4.0
    
    
    
    2.3Total costs and expenses
    
    
    48.7
    
    
    
    43.6Income from operations
    
    
    18.7
    
    
    
    20.5Other income, net
    
    
    0.5
    
    
    
    4.8Income before provision for income taxes
    
    
    19.2
    
    
    
    25.3Provision for income taxes
    
    
    7.7
    
    
    
    9.7Net income
    
    
    11.5
    %
    
    
    15.6
    %
  Three Months Ended March 31, 2008 and 2007
 Revenues.
 Cost of services.
 12




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Gross profit.
 Member relations and marketing.
 General and administrative.
 Depreciation and amortization.
 Other income, net.
 Provision for income taxes.
 13




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Liquidity and Capital Resources
  Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
   Contractual obligations
  14




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Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
  Foreign currency exchange rate risk
  
 Item 4. Controls and Procedures.
  15




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
 Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of a
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plan
    
    
    Under the PlansJanuary 1, 2008 to January 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    64,245,659February 1, 2008 to February 29, 2008
    
    
    300,000
    
    
    $
    40.20
    
    
    
    300,000
    
    
    $
    52,187,015March 1, 2008 to March 31, 2008
    
    
    640,000
    
    
    $
    39.93
    
    
    
    640,000
    
    
    $
    26,630,871Total
    
    
    940,000
    
    
    $
    40.02
    
    
    
    940,000
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  16




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Item 6. Exhibits.
  Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended31.2
    
    Certification of the Chief
Financial Officer pursuant to Rule 13a  14(a) of the Securities Exchange Act of 1934, as amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 17




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SIGNATURES
  THE CORPORATE EXECUTIVE BOARD COMPANY
                                   (Registrant)Date: May 9, 2008
    By:
    /s/ Timothy R. YostTimothy R. YostChief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer) 18




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Exhibit Index
 Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 19